The following are definitions of terms used in this description and in the field to which the invention relates:
The term “offer” is used herein to denote one of a number of alternatives available for presentation to a potential respondent. Examples of offer include but are not limited to offers for sale of a product or service, or offers ancillary to an offer for sale such as a “buy one get one free” promotion or special price.
“Respondent”, or potential respondent usually refers to a person or individual who is expected to respond to an offer. An example of a respondent is a potential customer for a product or service that is being promoted via an offer.
“Responses” can be in various forms and at various levels. Thus examples of responses include “clicks” on a link on a web page, purchase of a product or other acquisition, e.g., within a predetermined time period, and a yes (or no) answer to a question posed or sentence read by a call center operator. These are not limiting examples and others will be apparent to those skilled in the art. Sometimes the term “response” is used to denote a positive response, for example in situations where a negative response to an offer is possible. It should also be noted that responses can be Boolean (e.g., for a betting website, whether or not a bet was made), integer (e.g., number of bets made) or real (e.g., total value of bets made).
An offer is said to be “served” to a potential respondent. The serving of an offer may take the form of presentation of a web page, in which case it is commonly referred to as an “impression”. The serving of an offer may take the form of display in a part of a web page, for example designed to improve the sales of products or services being promoted via the web page. Other examples of serving of an offer include but are not limited to reading a piece of text (script) to a caller, playing a piece of music such as an advertising jingle and mailing a flyer or advertising material, e.g., in paper form. A party serving an offer, or on whose behalf the offer is served, for example the party whose products or services are being promoted, may have available to it a number of different offers available to be served to a respondent, the selection of which may be according to one or more characteristics of the respondent.
“Response rate” is usually measured as ratio of responses to serves of a particular offer, but can also be measured in terms of number of responses in a unit time period, for example if the rate of serve is relatively stable. Number of serves and time period can be considered to be equivalent. Response rate can also be determined as a ratio of positive responses to serves, where negative responses are possible, or a ratio of positive responses to a total of non-responses plus negative responses.
“Standard error” StdErr is a well-known statistical parameter and may be used for example as a measure of confidence in a calculation. Where several calculations are performed a standard deviation may be determined, with the standard error being related to the standard deviation StdDev by the equation: StdErr=Stdev/sqrt(n), where n represents the number of calculations used to determine the standard deviation. Thus the standard error decreases as sample size increases.
A “reward” is the hoped-for response to an offer. It may be as simple as a click on an item on a web-page, or it may be measured in monetary terms such as the profit derived from a customer making a purchase in response to an offer.
“Uplift” refers to the additional profit generated by the serving of an offer, above what would have been expected had the offer not been served. Thus, for example, if a product is offered at a special price and is bought by the respondent, and the respondent would not have bought the product at the normal price, the profit on the product is uplift. If the respondent would have bought the product anyway, the resulting uplift is negative. Uplift may be measured by splitting the population into two groups. One group receives a treatment, e.g., an offer, and the other is the control. The ratio of responses or rewards received between these groups is the uplift.